ECB Rate Cut and Payroll Reports Shape Market Outlook

By Tomasz Wisniewski|

Published: June 07 2024, 06:06 GMT+0

ECB Rate Cut and Payroll Reports Shape Market Outlook

As we enter the first Friday of June, all eyes are on today’s significant economic data releases. Thursday was relatively uneventful, but the European Central Bank’s interest rate cut of 25 basis points to 4.25% grabbed attention. This expected move had minimal impact on the Euro, which remained stable post-announcement.

Today’s highlight is the U.S. non-farm payrolls report, anticipated at 182,000, indicating a potential rise from the previous month. This is accompanied by average hourly earnings data expected at 0.3%. Additionally, Canada will release employment change and unemployment rate figures, adding further excitement to the trading day.

Current Market Conditions

Indices: The Nasdaq continues to shine, driven by NVIDIA’s stellar performance, surpassing Apple in market cap. Other indices like the DAX and Dow Jones are experiencing bearish corrections but are showing signs of stabilization.

Currencies: On the currency front, the Japanese yen and Australian dollar are demonstrating strength this morning, while the British pound and New Zealand dollar are weaker. This reflects the market’s cautious approach ahead of today’s key data.

Commodities: Commodities are displaying mixed trends. Precious metals such as gold and silver surged on Thursday, reaching weekly highs, although they are seeing slight corrections today. Oil has been volatile, with a sharp drop earlier in the week followed by a modest recovery attempt.

What to Watch Today

Expect heightened volatility as the non-farm payrolls report could significantly influence market sentiment. A stronger jobs number might boost the U.S. dollar and pressure equity markets, while a weaker report could support risk assets and weaken the dollar. Also, keep an eye on Canadian employment data for potential impacts on the Canadian dollar.

Today’s trading will heavily depend on these economic data releases. Stay informed and be prepared for possible market movements.